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Mudarabah Meaning and Definition: Mudaraba is derived from the Arabic word ‘daraaba’ which means partnership or profit sharing. ... Contrast this with a Mudharabah agreement for the same project. Here, one partner provides the entire $100,000 while the other provides the entrepreneurial effort. The profit-sharing ratio might be 60:40, with ...
Learn about the concept and application of mudarabah, a profit-sharing contract in Islamic finance, from Bank Negara Malaysia's official document.
26 Mac 2024 · Mudarabah Meaning. Mudarabah (profit-loss sharing business) is a type of business agreement between two parties where one party provides capital (Rabb-ul-Maal) and the other labor or management (Mudarib) for the business. It helps finance businesses based on profit sharing without involving any riba or interest.
What is Mudarabah?1. Mudarabah:The term refers to a form of business contract in which one party brings capital and the other personal effort. The proportionate share in profit is determined by mutual agreement. But the loss, if any, is borne only by the owner of the capital, in which case the entrepreneur gets.
Mudharabah. Mudarabah, the most-widely known Islamic contract, is a profit sharing contract in which one party (the Rab al Maal) provides funds and the other (the managing trustee, the Mudarib or Ameel) management expertise. This contract is believed to come from the Arabic word darb, which means walking and traveling on the earth.
